Commodities are a good investment

I'm afraid the stock market will crash (commodities will last) I would love to buy...

  • gold

    Votes: 1 33.3%
  • commodities

    Votes: 0 0.0%
  • both

    Votes: 2 66.7%

  • Total voters
    3
  • Poll closed .

QuickHitCurepon

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I worked at James C. Taylor Co. and learned a little of how commodities are traded, when I was sole assistant to the president of the company for 3 months.

James C Taylor CO - Palo Alto, California (CA) | Company Profile

Which commercial one grows on you? Corn, pork bellies, soybeans, oil, rubber?

List of traded commodities - Wikipedia, the free encyclopedia

*Gold is used commercially also like in the manufacture of computers, but for the purposes of this poll, gold has a special niche as an investor's go-to alternative besides the rest, and I won't count it here as a commercial product for convenience sake, unless there is a strong interest to discuss that.

Will gold top $2,000.00 within the next quarter? :eek:
 

jwoodie

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I worked at James C. Taylor Co. and learned a little of how commodities are traded, when I was sole assistant to the president of the company for 3 months.

James C Taylor CO - Palo Alto, California (CA) | Company Profile

Which commercial one grows on you? Corn, pork bellies, soybeans, oil, rubber?

List of traded commodities - Wikipedia, the free encyclopedia

*Gold is used commercially also like in the manufacture of computers, but for the purposes of this poll, gold has a special niche as an investor's go-to alternative besides the rest, and I won't count it here as a commercial product for convenience sake, unless there is a strong interest to discuss that.

Will gold top $2,000.00 within the next quarter? :eek:
What do YOU think?
 
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Oil supply increase by US, relaxation of Iran sanctions and Libya possibly gaining control of oil facilities in Eastern Part of the country will lead to excess oil supply in the world, however OPEC maintains that there will not be excess oil supply in the world in 2014 as excess production will be offset by increasing demand and OPEC members will maintain a quota of production
 

Delija

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I worked at James C. Taylor Co. and learned a little of how commodities are traded, when I was sole assistant to the president of the company for 3 months.

James C Taylor CO - Palo Alto, California (CA) | Company Profile

Which commercial one grows on you? Corn, pork bellies, soybeans, oil, rubber?


*Gold is used commercially also like in the manufacture of computers, but for the purposes of this poll, gold has a special niche as an investor's go-to alternative besides the rest, and I won't count it here as a commercial product for convenience sake, unless there is a strong interest to discuss that.

Will gold top $2,000.00 within the next quarter? :eek:
First off - gold's use in computers is so minimal it's barely a factor - why not just say it's used as an electrical conductor? That at least would mean something.

the only truly large commercial use of gold is in jewelry (40%).

Gold's chances of going above .$2000 an ounce in ANY quarter is nothing more than a pure guess to anyone. If there were a fundamental reason for gold to go up or down in the next 3 months then it would already be at that price now. But historically, gold has under-performed every investment I can think of - (other than in brief panic situations which gold "bugs" count on). Like the first few hours after Reagan was shot.

Even at $2000 an ounce it has less real buying power than at almost any time since it was deregulated by Nixon in 1972. And certainly since it spiked in late '79 and early 1980. (I think it went above $800 for a short time - same time that Silver went to $50 - and then back down to about $6 even faster than it went up (Hunt Brother's fiasco).

Why would sane people invest in a commodity that pays no dividends, no interest and costs money to store? No mystery why there's a negative premium on gold futures virtually always.

BTW, it cost TODAY right around $350 an ounce to mine and refine gold. So every penny above that intrinsic value is based on fear and/or greed. Why do you think there are so many radio commercials running at all times to get people to "invest" in gold? If it was the great "investment" the sellers make it out to be, why in the world would they be sellers at all? (In fact the radio ads are mostly aired in areas with lower educated demographics).

Enough about gold - anyone who doesn't have an industrial use for it and thinks of it as a "hadge against inflation" - or any of the other typical "reasons" you hear advertised is likely to be a pessimist by nature.




as for the "poll" - where's "none of the above"????

Is this supposed to be a joke or are you serious?

James Taylor? The singer that went bald and used to be married to Carly Simon? Now he's in the finance business? LOL.

Three months isn't even an internship. Did you have a series 3 license? (or any license)?

I don't mean to put you down -everyone starts somewhere, but your question (and poll) are almost childish.

I've been a floor trader and a prop trader since 1984 and I would NEVER put my own money into a futures contract. They are for bona-fide hedgers (if you understand what they are) - for speculators they are less likely to work out well than playing Russian Roulette.

What other kind of regulated investment can you name in which you can (and likely will) lose more than your entire invested capital? You may say "selling naked options", but there's always a way out of a bad options position - like just taking a loss and moving on - there are also very simple ways to limit your possible losses. (like using countless spread strategies). As an exchange member you can "cover" a naked position that goes against you by buying the underlying stock without needing margin (same goes for not needing margin for any option positions - it's all based on "haircut" - which is based on a formula for risk of any given underlying equity (basically just multiplying implied volatility by price and then dividing that by the number of days over 365) - oversimplified, but close enough so most people should at least understand the concept - the actual formula is slightly more complex, but not by much.


But with commodities since there's actual delivery, so you have to be able to give or take delivery if you can't get out of a fast moving market (up or down limit and the contracts stop trading - even if it's right at the open - ask anyone who was around to trade or even watch silver and gold contracts trade in early 1980 - or S&P futures in October of 1987.

There are options on futures, but that's not what you asked about and not on every commodity that trades.

Anyone who believes that political conditions (like the mentioned possible loosening of trade restrictions with Iran in regard to oil) isn't already factored into futures prices (same with seasonal weather, etc.) - is what's called a "fish" - Professional traders (not to mention market makers if not on an open-outcry exchange) will rip you apart before you even get a confirmation.

I could go on, but there's just too much reason to avoid trading commodities futures for speculators that a list of reasons beyond what I already mentioned (the most basic stuff everyone knows - except the "fish" who learn soon enough would take up too much space - on the other side of the issue, a list of reason TO "invest" in commodities futures for speculators doesn't exist.

I never hesitated to make an options trade that exceeded reportable limits (30,000 contracts at that time) but I never traded one single futures contract other than S&Ps and they were only to hedge risk when there wasn't another way (like using XMI against OEX - sometimes it made sense, sometimes the futures made sense - but always on both sides of the market in those cases). Anyone who knows what a back-spread is knows what I'm talking about and those who don't probably don't understand anything I've said. :doubt:

Of course it was never my money - I traded on the floors (5 simultaneously using nominees) for an Asian bank. My own investments were and still are stocks I like, ETFs (used to be called "closed end mutual funds) - and a long time ago when my kids were babies, zero coupon treasury "strips".

Best of luck to all.

My first post here - I registered just for this one ridiculous thread and am unlikely to ever post here again (never say never - but chances are slim to none) - But I saw the first post and couldn't resist.

Oh yeah - I didn't mention I've been trading both on the floor and off since 1984 when I started as a registered rep for Merrill Lynch - and after I had my series 7 (like everyone) I took the series 3, realized how much I hated being a broker and moved to Chicago to trade on the floor at the CBOE first and then the others (Amex, NYSE, PHLX, MWSE and PSE) -

Then since '96 I've been trading for a hedge firm (can't mention the name - company policy).
 

william the wie

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I think the big price of the DJIA in gold is driving this thread. Your argument about dscernable value vs. relative value I think misses the point.
 

Delija

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I think the big price of the DJIA in gold is driving this thread. Your argument about dscernable (sic) value vs. relative value I think misses the point.
I can't agree or disagree since I don't know what you are trying to say. What is a "discernible" value? And how can you use the term "relative value" in the context you seem to be trying to do?

Of course I'm "missing the point" since there seems not to be one. ???

What is the meaning of the term "discernible value"? (or "relative value" in the context you seemed to be attempting to use it)?

In fact how meaningful is an archaic index of only 30 stocks that are changed by at the whim of a company now owned by the same company that pretends to offer entertainment as "news" on TV? (FOX "News" to be specific) -
 
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william the wie

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Absolute value is a share selling for less than Net Working Capital although less than 50% of tangible book is also used. the dow priced at 10 oz is a good crash up ahead indicator 15+ oz of gold is a bear wet dream.
 

Delija

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Absolute value is a share selling for less than Net Working Capital although less than 50% of tangible book is also used. the dow priced at 10 oz is a good crash up ahead indicator 15+ oz of gold is a bear wet dream.[/QUOTE

Ridiculous - where did you hear these fantasies?

Best of luck - you'll need it desperately if you believe what you say here. I haven't ever heard such nonsense in 30 years of trading as a professional and another 25+ years as an investor.

But nothing surprised me when it comes from people who think that the price of gold is ANY kind of market (or economic) indicator.

Let me guess - if you play craps, you bet the "don't" ?

Peace, and farewell,
D.
 

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